Income Tax Act 2007 section 237

Time limits for assessments

Section 237 sets out the time limits within which HMRC may make assessments to withdraw or reduce Enterprise Investment Scheme (EIS) income tax relief, or issue related notices.

• HMRC may assess to withdraw or reduce EIS relief, or issue a notice requiring a tax return amendment, within 6 years after the end of the relevant tax year
• The relevant tax year is the later of the year in which the money raised was required to be used, or the year in which the event triggering the withdrawal or reduction of relief occurred
• The 6-year time limit does not restrict HMRC's separate power to assess beyond that period where tax has been lost through deliberate or careless conduct
• This ensures HMRC has adequate time to act on EIS relief issues while still providing certainty to investors that assessments cannot be raised indefinitely